Trade, FDI, and congestion - the small and very open economy

Kristof Dascher

No 200009, Working Papers from School of Economics, University College Dublin

Abstract: Typically, a small and open economy trades goods at given world prices. Here, we present a model of a very open small economy, where capital and labor are internationally mobile, too. When investing into infrastructure, the economy’s government attracts not only mobile capital but mobile labor, also. These capital and labor inflows into the economy reinforce each other. They contribute to rising welfare for land owning indigenous households. But all potential benefits for land renting immigrant households are capitalized into higher land rents. The paper is also an attempt to give an account of the recent economic boom in Ireland.

Keywords: Foreign direct investment; Small open economy; Open city; Investments, Foreign; International trade; Ireland--Economic conditions--21st century; Labor mobility; Capital movements (search for similar items in EconPapers)
JEL-codes: F11 F23 R23 (search for similar items in EconPapers)
Date: 2000-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://hdl.handle.net/10197/1253 First version, 2000 (application/pdf)

Related works:
Working Paper: Trade, FDI and Congestion - the Small and very Open Economy (2000)
Working Paper: Trade, FDI and Congestion: the Small and Very Open Economy (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200009

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